Business partners’ conduct

Businesses cannot insulate themselves from consequences arising from a partner's conduct.

UNGP 13(b) states that a business must:

Seek to prevent or mitigate adverse human rights impacts that are directly linked to their operations, products or services by their business relationships, even if they have not contributed to those impacts. [emphasis added]

This means businesses must think comprehensively and proactively about the nature of their relationships, supply chains, and the products and services they contribute to. Businesses need to turn their mind to two questions:

  1. What are the adverse human rights impacts associated with the final product or service to which they are contributing?
  2. What leverage do they have to influence those impacts?

Ensuring compliance with UNGP 13 is not formulaic, as each business relationship is unique. The concept of one business’s leverage over another is explored in more detail in UNGP 19. Businesses with the leverage to mitigate or prevent adverse human rights impacts of their business partners are required to use that leverage. However, this does not mean that businesses that do not have adequate leverage to mitigate or prevent adverse human rights impacts can proceed in their relationships with impunity.

UNGP 19 states that all businesses, large and small, must be prepared to cease a relationship where the adverse human rights impacts cannot be effectively mitigated.

Consider the examples of a family-owned corporate-cleaning service in a small town and a national corporate cleaning service procuring uniforms from an overseas supplier. Both businesses have an obligation under UNGP to ensure there are no adverse human rights impacts associated with manufacturing the uniforms. The smaller business is likely limited in its ability to impact the supplier's conduct to prevent or mitigate those adverse impacts. It might even be limited in ascertaining whether adverse impacts exist. The larger business, or an industry association, has greater leverage owing to its buying power and has more leverage to prevent or mitigate adverse impacts before proceeding with the transaction.

Regardless of the size or influence of a business, the key point for businesses and their lawyers is that businesses can be responsible for adverse human rights impacts they do not directly cause. For more guidance, see the Best Practices Section.